MWSS penalizes Manila Water with P1.1 billion for supply cuts

The Metropolitan Waterworks and Sewerage System on Wednesday slapped the Manila Water Co. Inc. with a P534-million fine and another P600 million to fund a new water source in connection with the water crisis in Metro Manila and Rizal.
Administrator Reynaldo Velasco said the East Zone water concessionaire must pay a total of P1.134 billion.
But he clarified that Manila Water must not pass on its expenditures for the establishment of a new water source on its customers.
He said Manila Water violated its concession agreement with the government under Article 10.4 for failure to provide 24/7 water supply to its consumers.
“The water shortage was an eye-opener, and sad to say, the new MWSS Board inherited this lingering problem having assumed office only in February 2017. We are on a catch up,” Velasco’s statement read.
Manila Water was ordered to deduct P534 million in penalty from the bills of its customers.
In related developments:
• Manila Water said it would abide by the decision of the Metropolitan Waterworks and Sewerage System to pay a financial penalty upon the recommendation of the MWSS Regulatory Office declaring that the East Zone concessionaire should be penalized under Section 10.4 of the Concession Agreement for its inability to meet its service obligations to provide 24/7 water supply to its consumers.
“We will abide by the MWSS Decision to impose a penalty. While we are not the root cause for the inadequacy of the raw water supply coming from Angat Dam which we are mandated to treat and distribute, Manila Water, as agent and contractor of water services of MWSS, hold ourselves accountable for our inability to provide our consumers with the usual uninterrupted water service,“ says Manila Water president and CEO Ferdinand dela Cruz.
“Our inability to provide our usual 24/7 water supply to some of our consumers is because Manila Water’s allocated water supply from Angat Dam is no longer sufficient for the total demand of the East Zone consumers. This raw water allocation has remained unchanged at 1,600 MLD since the Concession started in 1997 when the East Zone had a population of only 3 million people. Today, Manila Water serves a population of almost 7 million people whose per capita consumption has significantly increased through over two decades of economic progress in Metro Manila. We cannot source any more from our system losses which have already been brought down to 12 percent from a high of 63 percent when we inherited the East Zone concession of Metro Manila in 1997.”
• Senators urged the MWSS to ensure that the P1-billion sanction slapped on Manila Water Co. due to the recent water shortage would benefit its customers.
Senator Aquilino Pimentel III lauded the MWSS for sanctioning Manila Water, saying it showed the regulator was becoming strict with the concessionaire.
“That is a good development that the regulator is becoming strict with the concessionaire,” said Pimentel.
“But as I understand the law and their contract, that penalty must be reimbursed to the customers of Manila Water. That is my call to MWSS,” he said.
Pimentel noted that the penalty was for the benefit of the customers of Manila Water who suffered the hardship and inconvenience.
Senator Francis Pangilinan also said the amount should benefit and go directly to the consumer who had been “greatly inconvenienced by the water interruptions.”
Senate President Vicente Sotto III said it’s high time the government tightened it’s grip on public service utilities.
“We should establish and update all these in the new Public Service Act,” he said

In a Dobol B sa News TV interview, beamed nationwide, Velasco said “MWSS and the Manila Water will have to discuss about the mechanism. In most probability, the deduction would take effect in June.”
As far as the water firm is concerned, Dela Cruz, in a statement, said “while we are not the root cause for the inadequacy of the raw water supply coming from Angat Dam which we are mandated to treat and distribute, Manila Water, as agent and contractor of water services of MWSS, hold ourselves accountable for our inability to provide our customers with the usual uninterrupted water service.”
He said they would abide by the government’s decision to pay P1.134 billion.
He said Angat Dam’s water allocation was not enough for the high demand for their seven million customers.
Earlier, Manila Water offered a voluntary and one-time bill waiver program in March to be reflected in customers’ April bill as a relief to its customers who were affected by massive water service interruptions.
On March 6, the customers of the water company started to experience water shortage.
“Manila Water has strongly advocated for many years for the development of new water sources beyond Angat Dam, both to ensure sufficiency of water supply as well as resiliency in case of any calamity around the Angat Dam system. However, the development of new water sources is, under the concession agreement, ultimately the responsibility of MWSS,” Dela Cruz said.
“Manila Water has strongly advocated for many years for the development of new water sources beyond Angat Dam, both to ensure sufficiency of water supply as well as resiliency in case of any calamity around the Angat Dam system. However, the development of new water sources is, under the Concession Agreement, ultimately the responsibility of MWSS,” Dela Cruz added.
MWSS imposed a penalty of P534.05 million on Manila Water after going through a process defined in Section 10.4 of the Concession Agreement. It also separately asked Manila Water to set aside funds in the amount of P600 million for the development of a medium- to long-term water source for the East Zone.
Manila Water recently announced its voluntary and one-time bill waiver program for its consumers which began implementation on April 1.
Under the program, all consumers of the East Zone will receive a waiver equivalent to the first 10 cubic meter of their March consumption which will be reflected in their April bills.
Severely affected consumers or those consumers who experienced absolutely no water service for at least seven days between March 6-31 will not be charged at all for their March consumption.
Dela Cruz also disclosed the progress of the company’s service recovery efforts which were now geared towards addressing those residing in the elevated and farthest areas of the concession who are still inconvenienced due to the water supply shortage.
Dela Cruz said: “As of April 23, we have made water available for at least 8 hours, at least at the ground floor level, to 99 percent of our customer base. We have narrowed the gap of our supply deficit which has been reduced to 57 million liters per day from a high of 150 million liters per day through various supply augmentation efforts.
“We reaffirm our commitment to work closely with MWSS to address the remaining water supply deficit. We continue to seek understanding from our consumers as we finetune our operations to spread the still limited water supply across our customer base.”
READ: MWSS board orders study on Manila Water penaltyREAD: Manila Water COO quits amid water shortage issue

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